Core Viewpoint - Telesat, a leading satellite operator, is set to discuss its financial results for Q1 2025 in a conference call scheduled for May 6, 2025, at 10:30 a.m. EDT [1] Group 1: Financial Results Announcement - Telesat will release its financial results prior to the conference call on its website under the "Investors" section [2] - The conference call will be hosted by Telesat's President and CEO, Daniel S. Goldberg, and CFO, Andrew Browne [1] Group 2: Access Information - The teleconference can be accessed via a toll-free number for North America and a separate number for international callers, with an access code provided [2] - A webcast of the conference call will be available for listening, and a replay will be archived on Telesat's website [3] Group 3: Company Overview - Telesat is recognized for its engineering excellence and customer service, positioning itself as a major global satellite operator [5] - The company is focused on delivering connectivity solutions that address complex communication challenges, enhancing operational efficiency and profitability for its customers [5] Group 4: Innovation and Future Plans - Telesat Lightspeed, the company's advanced Low Earth Orbit satellite network, aims to provide high-capacity, secure, and resilient connectivity with speeds comparable to fiber [6] - The network is designed to meet the needs of various sectors, including telecom, government, maritime, and aeronautical customers [6]

Core Insights - Telesat Government Solutions has appointed Ronald Thompson Jr. as Vice President of Growth, focusing on expanding the government user community for the Telesat Lightspeed Low Earth Orbit (LEO) satellite network [1][3] Company Overview - Telesat Government Solutions is a wholly-owned subsidiary of Telesat, providing secure global communications networks essential for the U.S. Government and its allies [4] - Telesat is recognized as one of the largest and most innovative global satellite operators, delivering critical connectivity solutions to address complex communication challenges [5] Leadership and Expertise - Ronald Thompson brings nearly four decades of experience, including 26 years in the U.S. Air Force, and has held senior roles in space operations and acquisition [2] - Prior to joining Telesat, Thompson was Vice President of Business Development at LinQuest Corp, where he developed growth strategies for various markets [2] Strategic Goals - The company aims to enhance its mission-critical LEO SATCOM solutions for government partners, focusing on military, intelligence, and civil agencies [3] - Telesat Lightspeed is designed to provide high-capacity, secure, and resilient satellite connectivity with fiber-like speeds, catering to telecom, government, maritime, and aeronautical customers [6]

Core Insights - Satellites have played a crucial role in telecommunications since the launch of Sputnik in 1957, enabling various services such as media streaming and electronic communication [1] Industry Overview - Recent advancements in satellite technology are enhancing capabilities in monitoring, photography, and data transmission, which could lead to new investment opportunities in the satellite industry [1]

Company Overview - Telesat is a global satellite operator, previously known as Telesat Canada, providing connectivity solutions to governments, enterprises, and other organizations through its satellite fleet [1] Leadership and Expertise - Michael (Mike) Dion is an expert in FP&A, Corporate Finance, and Small Business, with 12 years of experience in Fortune 100 companies and various industries including Telecom, Media and Entertainment, Hospitality, and Construction [1] Investment Approach - The investment strategy focuses on identifying value opportunities where investors may overreact to negative news or underreact to positive news, emphasizing strong fundamentals and a preference for dividend-paying stocks [1] - The importance of cash flow is highlighted, indicating it is critical for both companies and investors at all levels [1]

Core Insights - Telesat has secured a significant multi-year contract with Viasat Inc. for its Lightspeed Low Earth Orbit (LEO) services, which will be integrated into Viasat's offerings for various markets including aviation, maritime, enterprise, and defense [1][2] Company Overview - Telesat is recognized as one of the largest and most innovative satellite operators globally, focusing on delivering critical connectivity solutions to address complex communication challenges [5][6] - The Telesat Lightspeed network is designed to meet the rigorous requirements of telecom, government, maritime, and aeronautical customers, promising high-capacity, secure, and resilient links with fiber-like speeds [6] Contract Details - Viasat plans to utilize Telesat Lightspeed to enhance its broadband connectivity services, particularly in the commercial aviation sector, where it is already the largest provider [2] - The integration will allow thousands of aircraft equipped with Viasat's GM-40 antenna to access the Telesat Lightspeed network starting in late 2027 [2] Service Capabilities - Telesat Lightspeed offers high-speed, low-latency broadband globally, ensuring quality connectivity for passengers on flights, including over polar regions, backed by enterprise-grade Service Level Agreements (SLAs) [3] - The network is built to government cybersecurity standards and employs a Zero-Trust Network Access architecture, making it suitable for defense communications [4]

Financial Data and Key Metrics Changes - Telesat reported revenues of $571 million for the full year 2024, with adjusted EBITDA of $384 million and cash from operations of $62 million, outperforming guidance [21] - In Q4 2024, revenues were $128 million and adjusted EBITDA was $73 million, down $38 million and $50 million respectively from Q4 2023 [22] - The adjusted EBITDA margin decreased to 57.4% in Q4 2024 from 74.3% in Q4 2023, with the GEO segment adjusted EBITDA margin at 78% compared to 82.2% in the same period [22][23] - A net loss of $447 million was recorded in Q4 2024, compared to a net income of $39 million in Q4 2023, primarily due to foreign exchange impacts [25] Business Line Data and Key Metrics Changes - The GEO business is expected to face continued revenue pressure in 2025, with a forecasted decline of approximately $155 million, largely due to lower rates from the DTH business and the end of service contracts [9][10] - The enterprise and consulting activities are also expected to contribute to revenue decline, particularly from maritime and aero markets due to competition from Starlink [10][11] - Operating expenses for Lightspeed are anticipated to increase by approximately $40 million in 2025, driven by investments in engineering and operations [11] Market Data and Key Metrics Changes - The enterprise business has seen significant revenue declines, with a drop of $93 million in 2024, attributed to competition from Starlink and the sale of the Infosat business [72][80] - The company expects continued headwinds in the enterprise space in 2025, with a shift from GEO to LEO impacting revenues [80] Company Strategy and Development Direction - Telesat is focused on disciplined execution in both GEO and LEO markets, with a strong emphasis on building out and commercializing the Lightspeed constellation [12][15] - The company has secured funding from the governments of Canada and Quebec for Lightspeed, investing over $1 billion in development and deployment in 2024 [7][21] - Telesat is optimistic about the market for commercial services, particularly in light of geopolitical shifts increasing demand for sovereign national security requirements [14][15] Management's Comments on Operating Environment and Future Outlook - Management anticipates a challenging operating environment for the GEO business to persist in 2025, with a focus on mitigating market pressures [8][12] - The company is optimistic about the potential for Lightspeed, expecting to launch the first batch of satellites in late 2025 and seeing strong traction with prospective customers [13][14] - Management highlighted the importance of refinancing restricted group debt as a priority for the year [15][58] Other Important Information - Telesat ended 2024 with $552 million in cash on the balance sheet and a total leverage ratio of 6.68 times [21][31] - The company repurchased $262 million in debt during 2024, resulting in annual interest savings of approximately $54 million [27] Q&A Session Summary Question: Can you provide insight on the geopolitical shifts affecting discussions? - Management noted that discussions have accelerated due to a greater focus on sovereign customers needing access to advanced LEO networks, particularly in Canada [36][42] Question: What is the current backlog for Lightspeed? - Management indicated that the LEO backlog is around $600 million, including a significant agreement with the government of Canada, and expects it to grow significantly by the end of the year [44][50] Question: What is the update on debt restructuring? - Management confirmed that refinancing restricted group debt is a priority and is expected to be tackled sooner rather than later [56][58] Question: How does the GEO revenue decline look for 2026? - Management has not projected far into 2026 but noted that the GEO business is predictable, with visibility on major contract renewals [60][62] Question: What is the state of the enterprise business? - Management acknowledged challenges in the enterprise segment due to competition and the aging satellite fleet, but remains optimistic about future opportunities with Lightspeed [80][112]

Core Insights - Telesat reported a significant decrease in revenue and net loss for the year ended December 31, 2024, primarily due to reduced demand from North American direct-to-home satellite video customers and other market challenges [2][6][12]. Financial Performance - For the year 2024, Telesat's consolidated revenue was $571 million, a decrease of 19% ($133 million) compared to 2023, with a 20% decline when adjusted for foreign exchange rates [2][6]. - Operating expenses for 2024 were $208 million, an increase of 2% ($3 million) from 2023, attributed to higher wages and professional fees [3]. - Adjusted EBITDA for 2024 was $384 million, down 28% ($150 million) from the previous year, with an Adjusted EBITDA margin of 67.2%, compared to 75.8% in 2023 [4][5]. - Telesat reported a net loss of $302 million for 2024, a significant decline from a net income of $583 million in 2023, largely due to foreign exchange impacts and higher impairment charges [6][10]. Quarterly Results - For Q4 2024, Telesat's consolidated revenue was $128 million, a decrease of 23% ($38 million) compared to Q4 2023, driven by contract renewals and lower enterprise revenues [7]. - Operating expenses for Q4 were $58 million, an increase of 17% ($9 million) from the same period in 2023 [8]. - Adjusted EBITDA for Q4 was $73 million, a decrease of 40% ($50 million), with an Adjusted EBITDA margin of 57.4%, down from 74.3% in Q4 2023 [9]. Future Outlook - For 2025, Telesat expects revenues between $405 million and $425 million, reflecting anticipated declines in various customer segments and increased operating expenditures related to the Telesat Lightspeed program [12][19]. - The company has secured $2.54 billion in loan financing from the Governments of Canada and Quebec to support the Telesat Lightspeed project, which aims to enhance connectivity and create jobs in Canada [2][13]. Strategic Developments - Telesat completed the Preliminary Design Review for the Telesat Lightspeed program in December 2024, marking a key milestone in its development [2][13]. - The company has established strategic partnerships with Space Norway, Orange, and ADN Telecom, indicating strong customer interest in Telesat Lightspeed services [2]. Management Changes - Telesat's CFO Andrew Browne announced plans to retire later in 2025, with a search for his successor already underway [2][13].

Financial Performance - For the year ended December 31, 2024, Telesat reported consolidated revenue of $571 million, a decrease of 19% ($133 million) compared to the prior year[2]. - Adjusted EBITDA for the full year 2024 was $384 million, a decrease of 28% ($150 million), with an Adjusted EBITDA margin of 67.2%, down from 75.8% in 2023[4]. - Telesat had a net loss of $302 million for the year, compared to net income of $583 million for the prior year, primarily due to foreign exchange impacts and higher impairment charges[5]. - For the quarter ended December 31, 2024, consolidated revenue was $128 million, a decrease of 23% ($38 million) compared to the same period in 2023[6]. - Adjusted EBITDA for the quarter was $73 million, a decrease of 40% ($50 million), with an Adjusted EBITDA margin of 57.4%, down from 74.3% in the same period in 2023[8]. - Revenue for Q4 2024 was $127,995,000, a decrease of 22.8% from $165,901,000 in Q4 2023[22]. - Operating income for Q4 2024 was $(227,528,000), compared to $(9,668,000) in Q4 2023, indicating a significant decline[22]. - Net loss attributable to Telesat Corporation shareholders for the year 2024 was $(126,311,000), compared to a profit of $10,465,000 in 2023[22]. - Adjusted EBITDA for the year 2024 was $383,737,000, down from $533,702,000 in 2023, reflecting a decrease of 28.0%[27]. - Adjusted EBITDA margin for Q4 2024 was 57.4%, compared to 74.3% in Q4 2023, showing a decline in profitability[27]. Future Projections - For 2025, Telesat expects revenue between $405 million and $425 million, with Adjusted EBITDA projected between $170 million and $190 million[18]. - Telesat anticipates a substantial decrease in consolidated Adjusted EBITDA for 2025, down 53% at the mid-point of guidance compared to 2024[2]. Financial Position - Total assets increased to $6,945,179,000 in 2024 from $6,313,368,000 in 2023, representing a growth of 10.0%[23]. - Cash and cash equivalents decreased significantly to $552,064,000 in 2024 from $1,669,089,000 in 2023, a decline of 66.9%[24]. - Long-term indebtedness decreased to $3,096,615,000 in 2024 from $3,197,019,000 in 2023, a reduction of 3.1%[23]. - Total liabilities increased to $4,448,474,000 in 2024 from $3,914,385,000 in 2023, an increase of 13.6%[23]. - Telesat Corporation's total shareholders' equity rose to $2,496,705,000 in 2024 from $2,398,983,000 in 2023, an increase of 4.1%[23]. Contracted Revenue Backlog - Telesat's contracted backlog for future services was approximately $1.1 billion as of December 31, 2024[10]. - The contracted revenue backlog represents Telesat's expected future revenue from existing service contracts, primarily from satellite capacity agreements[29]. - The majority of Telesat's contracted revenue backlog is derived from contractual agreements for satellite capacity[29]. - The backlog calculation adheres to revenue recognition policies under IFRS 15, without discounting for present value[29]. Financial Metrics and Definitions - Telesat utilizes Adjusted EBITDA and Adjusted EBITDA margin to enhance understanding of operating results and facilitate comparisons with competitors[29]. - Adjusted EBITDA and Adjusted EBITDA margin are not substitutes for cash flows from operations or net income as indicators of liquidity and operating performance, respectively[29]. - Severance payments and special compensation for executives and employees are included in the financial metrics[29].

Satellite Fleet and Services - Telesat's GEO satellite fleet consists of 14 satellites, providing global coverage with a focus on the Americas, generating significant cash flows and maintaining a leading position in the satellite services market [339]. - For the year ended December 31, 2024, Telesat's broadcast services accounted for approximately 48% of total revenues, while enterprise services contributed about 47% [343]. - Telesat's consulting services contributed approximately 5% of total revenues for the year ended December 31, 2024, serving businesses and governments in over 40 countries [347]. - The company operates a primary Satellite Control Center in Ottawa, Ontario, managing 11 owned satellites and providing telemetry, tracking, and control services [353]. - Telesat Lightspeed is designed to provide fast, reliable, and secure broadband connectivity globally, targeting enterprise and government users who require fiber-like connectivity [330]. Revenue and Market Opportunities - Revenue breakdown for 2024 shows North America at $471.1 million, Asia and Australia at $36.5 million, Latin America and the Caribbean at $32.0 million, and Europe, the Middle East, and Africa at $31.5 million [344]. - Telesat's total addressable market (TAM) for GEO business is projected to reach approximately US$15.6 billion by the end of 2025, while the TAM for LEO is estimated at US$425 billion in 2025, expected to nearly double by 2032 [366]. - The enterprise and telecom market opportunity for LEO is estimated to be around US$415 billion in 2025, growing at a 7% annual rate to approximately US$575 billion by 2030 [368]. - The aviation market opportunity addressable by LEO is projected to be US$7 billion in 2025, with an anticipated growth rate of 15% annually, reaching US$15 billion by 2030 [376]. - The maritime market opportunity for LEO satellite constellations is expected to reach about US$3 billion in 2025, growing at a 7% annual rate to US$5 billion by 2030 [380]. Demand and Connectivity Solutions - Global broadband demand is forecasted to grow from 160 exabytes per month in 2023 to 563 exabytes per month in 2029, representing a 23% compound annual growth rate [361]. - Telesat Lightspeed is designed to provide low latency and high throughput, addressing the connectivity needs of underserved areas, including over three billion people lacking adequate broadband access [362][370]. - Telesat Lightspeed aims to deliver fiber-like connectivity to high-demand areas, including airports and seaports, to meet concentrated demand for connectivity [369]. - The flexible architecture of Telesat Lightspeed will allow dynamic allocation of capacity to any plane or maritime vessel globally, enhancing service delivery [379][383]. - Telesat's focus on enterprise and telecom markets will initially prioritize backhaul services, with potential future expansion into direct-to-consumer services as technology evolves [372]. Government and Regulatory Engagement - The company plans to leverage government programs aimed at improving connectivity in remote areas, such as the US$20 billion Rural Digital Opportunity Fund and the US$42 billion Broadband Equity, Access, and Deployment program [374]. - The government market opportunity for Telesat Lightspeed is estimated to be approximately US$1.8 billion in 2025, growing at an annual rate of 23% to reach about US$5.2 billion by 2030 [385]. - The U.S. government is the largest user of commercial satellite communications, primarily for DoD operations, which are expected to increase global requirements for such services [386]. - Telesat has established contracts with various U.S. government agencies, including DARPA and the U.S. Space Development Agency, indicating strong interest in Telesat Lightspeed as a commercial satellite solutions provider [408]. Financial and Investment Aspects - Telesat has secured funding of up to approximately US$2 billion from the Canadian federal and Quebec provincial governments, along with US$1.6 billion in equity contributions, to support the Telesat Lightspeed program [395]. - An agreement with the Government of Canada will provide Telesat with $600 million over ten years to enhance internet connectivity in rural and underserved areas, expected to generate a total of $1.2 billion for Telesat [397]. - Telesat Lightspeed has received approximately US$2 billion in financing to support its operations and bridge the digital divide in Canada [417]. Technological Innovations - Telesat Lightspeed will feature advanced phased array antennas capable of dynamically focusing multiple Gbps of capacity into demand hotspots, enhancing service delivery [401]. - The Telesat Lightspeed network will provide true global coverage from pole to pole, fulfilling the needs of government and mobility markets [404]. - The Telesat Lightspeed system is designed to offer low latency, with data traveling approximately 20 times faster than GEO satellites, enhancing competitiveness in the satellite broadband market [404]. - Telesat Lightspeed demonstrated effective backhaul transport for mobile network operators with round trip latency of 18-40 milliseconds during testing, among the lowest for satellite broadband connections [412]. Competitive Landscape - Telesat competes with major satellite operators like SpaceX and Eutelsat, leveraging its innovative architecture and advanced technology to maintain a competitive edge in the market [411]. Regulatory Compliance and Risk Management - Telesat has extensive experience in regulatory compliance, crucial for operating and commercializing a satellite network [417]. - The company is required to maintain satellite insurance under the covenants of its Senior Secured Credit Facilities, applicable only to GEO satellites [467]. - Telesat plans to purchase transport insurance for its Telesat Lightspeed program to cover satellites after shipment from the manufacturer [469]. - Telesat's risk management program includes on-board redundancies and oversight of satellite manufacturing to reduce the risk of failures and lower insurance costs [464]. Legal and Tax Matters - Telesat Canada is involved in a contract dispute with Shaw regarding payments for services on the Anik F2 satellite, claiming damages of $45 million for breach of contract [477]. - The total disputed tax amount with Brazilian authorities for the period 2002 to 2021 is $93.5 million, including interest and penalties [478]. - The Canadian tax authorities previously reassessed Telesat for $13.1 million related to transfer pricing issues, which was reversed in late 2023, resulting in a tax refund [479]. - Telesat believes the likelihood of a favorable outcome in its tax disputes is more likely than not, and no reserve has been established for these disputes [479][480]. Environmental and Insurance Considerations - Telesat is subject to various environmental laws and regulations but is not aware of any material environmental matters outstanding or threatened [482]. - The satellite insurance market has deteriorated in 2024, leading to significant premium rate increases and additional coverage restrictions [472]. - Regulatory bodies in various countries are considering new regulations for sustainable satellite operations, which may impact Telesat's future compliance requirements [483].

Core Insights - Telesat and ADN Telecom have entered a multi-year partnership to provide Telesat Lightspeed low earth orbit (LEO) connectivity solutions in Bangladesh and South Asia [1][3] - Telesat's LEO network is designed to meet the connectivity needs of telecom, enterprise, and government customers, with the first satellite launches expected in the second half of 2026 [2][6] - ADN Telecom will utilize Telesat Lightspeed services to enhance its offerings, participating in early field trials and launching full-time services by late 2027 [3][4] Company Overview - Telesat is recognized as one of the largest and most innovative satellite operators globally, with over 55 years of experience in satellite operations and engineering [2][5] - ADN Telecom is a leading telecommunications provider in Bangladesh, known for its advanced infrastructure and commitment to delivering next-generation digital services [7][8] Partnership Details - The partnership will enable ADN Telecom to manage and deliver customized connectivity solutions for various sectors, including enterprise, maritime, and government [3][4] - Telesat's LEO services will be integrated with ADN's terrestrial network, expanding the reach of ADN's offerings both locally and internationally [4] Future Developments - Telesat Lightspeed aims to redefine satellite connectivity with high-capacity, secure, and resilient links that offer fiber-like speeds [6] - Both companies will collaborate to secure local regulatory approvals for the deployment of Telesat Lightspeed services in Bangladesh [4]